1. Field of the Invention
The present invention relates to methods of debt collection and more particularly to an automated system that contacts debtors on behalf of creditors to secure automated payments, payment commitments or confirm that payments have already been made.
2. Description of the Prior Art
Lenders, such as banks, credit unions, and various financial institutions around the world have dramatically increased the amount of credit being extended to consumers and businesses alike. Businesses large and small have also increased the numbers of credit accounts extended to the public and other businesses. One significant problem with the extension of such credit accounts is delinquency in the payment of accrued balances. As the number of outstanding credit accounts and the associated risks increase, financial institutions and businesses alike are forced to increase their focus on the collections process or risk substantial losses.
A number of options are available for the collection of high-risk and/or past due accounts. Oftentimes, past due accounts are sent to a collection agency, where the creditor of the past due account receives a significant percentage of the amount ultimately collected by the collection agency. Alternately, a business or financial institution may develop its own in-house collections department. However, such ventures are rarely cost effective and don't typically produce efficient results, unless the business or financial institution has substantial resources and a large volume of high-risk and/or past due debtors. Another method of debt collection involves selling the delinquent account to a third party, for a stated price, to collect on the delinquent account. Typically, a creditor will receive a bid for the sale of all delinquent accounts but only within certain categories. Any method chosen by the business or financial institution will cost money and time, not to mention the vast number of credit account defaults and bankruptcies that have cost the credit industry billions of dollars in revenue. These losses in revenue are passed onto the consumer, spawning additional debt and debt delinquency.
There is a significant need for new, efficient and cost effective debt collection systems and methods. However, such systems and methods must optimize the use of collection resources. For example, use of an outbound telemarketing collection resource that uses live personnel to place the calls may result in a certain aggregate payment amount. However, the use of live collection personnel can be quite costly, averaging anywhere from $1.25 to $5.00 or more per call, depending on the collection agent's seniority, unionization and other work parameters. Skilled collections agents are a valuable resource that should only be applied to high-value collections calls. Cheaper collection methods, such as direct mail programs for example, will tend to cost far less than the use of live collections agents but typically produce limited results. Irrespective of the collection method employed, the creditor and the collection resource should be able to apply a filter or screening process in order to better focus the collection efforts according to the creditor's needs at that time.
Accordingly, what is needed is an automated system for assisting in the collection of high-risk and/or past due debts that is effective while remaining relatively inexpensive and simple for a business or financial institution to implement.